Monday, October 12, 2009
2 Connecticut Real Estate Agents Charged with Engaging in Short Sale Mortgage Fraud Schemes
Sergio Natera, 35, Bridgeport, Connecticut, and Anna McElaney, 38, Norwalk, Connecticut, have been indicted and charged with one count of conspiracy to commit bank fraud and one count of bank fraud. Natera and McElaney are licensed real estate agents and the charges stem from an alleged "short sale" mortgage fraud scheme involving four properties located in Connecticut.
The indictment was returned on October 6, 2009. Natera and McElaney appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport and each entered a plea of not guilty to the charges. Following the arraignment, each was released on a $50,000 bond secured by property.
A "short sale" transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on real property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.
The indictment alleges that in 2007 and 2008, Natera and McElaney conspired to defraud financial institutions of the full proceeds due to them on four separate real estate transactions in Bridgeport (2), Monroe and Wallingford, Connecticut. The indictment alleges that Natera and McElaney created straw buyer transactions in order to negotiate with mortgage holders to allow sales of the properties to occur without paying the mortgages in full. During the negotiations with the mortgage holders, Natera and McElaney knew that legitimate purchasers already had executed purchase and sale agreements with the property owners to purchase the property at higher prices. On each of the transactions, Natera and McElaney are alleged to have arranged for two closings to take place, the first from the property owner to the straw buyer at the short sale price, and the second from the straw buyer to the legitimate purchaser at a higher price. The indictment alleges that the mortgage lenders did not know about the second closing and received no proceeds from the second closing.
If convicted, Natera and McElaney each face a maximum term of imprisonment of 30 years and a fine of up to $1 million, on each count.
U.S. Attorney Nora R. Dannehy stressed that an indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial at which it is the Government's burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Ann M. Nevins.
In July 2009, the U.S. Attorney's Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to .
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service - Criminal Investigation Division; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
Nora R. Dannehy, United States Attorney for the District of Connecticut, announced the two-count indictment.
mortgage fraud
Great article. I am approached several times a month to do these transactions, and it’s nice to see affirmation that these are a no-go. I hope they got the title/escrow officer, too.
Posted by on 10/21 at 08:01 AM
really have got to do it the right way! dont try to game the banks and disclose everything on the A-B transaction as well as the B-C transaction, an I hope that they do make an example of these for all of us who are doing these deals correctly so that we can continue doing them.
Posted by on 10/21 at 07:23 PM
I believe these folks are wrong in what they did but 30 years and up to 1 million is not right. They should pay the overage and court cost. People have to remember, the BANKS ARE NOT INNOCENT. We are in this mess because of them. The short sale is the best way for the banks to recover the majority of their lost by doing these loans in the first place. Sellers need the short sale to be able to get on with their lives and get a quicker start. Realtors need the short sale to have a property in the right price range to sell. We need to clear the mortgage mess up and the short sale is the best for all. Without the sale sales there is going to be more REO’s. The property values will really drop then because the banks who aren’t telling the truth now will continue to have an overload of properties. To get their money the prices will have to drop even more. I’m involved with REO Bulk Deals now and I see packages of properties going as low as $1,000 per door. These folks should be slapped on the hand, pay back the overage and court cost. THEY SHOULD ALSO HAVE TO TAKE A COURSE ON HOW TO PROPERLY DO A SHORT SALE. If the deals are done correctly the seller, lender, new buyer and real estate agent all win. If there is an investor they win too. For the past few years everyone was fine with these transaction. The banks SHOULD DO THEIR HOMEWORK and work with investors on these short sales and lets get this country back to where it should be. The SHORT SALE is needed to clear up this mess that the BANKS/LENDERS have created. Shame on them with this Lawsuit.It takes 3 to 6 months to do a short sale. THEY KNOW WHAT WAS HAPPENING. I could go on with more important reasons but there is not enough time. Thank you.
Posted by on 10/30 at 04:50 PM
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
